Barclays has received a further boost in its battle with Edward Bramson, the corporate raider, after ratings agency Standard & Poor’s (S&P) warned a shake-up in strategy could damage the bank’s credit worthiness.

Ratings agencies have been keeping a close watch on Barclays as it has struggled in recent years.

Moody’s downgraded the bank’s credit rating to one level above “junk” earlier this year. However, S&P, its rival agency, reaffirmed its credit rating of BBB+ this month, leaving it three notches above junk.

S&P warned that the rating would be put at risk if “our confidence in the predictability of its management and strategy waned” – putting it at odds with Mr Bramson.

S&P also criticised Sherborne Investors, Mr Bramson’s vehicle, saying its intervention was an “additional constraint”.

Activist investor Edward Bramson wants to reduce the size of Barclay’s investment banking operation

Sherborne has built up a more than 5pc stake in the bank and has a stated goal of turning around underperforming companies by engineering radical change. It has previously secured overhauls in management and strategy at smaller UK firms Electra and F&C.

Mr Bramson is understood to be keen to downsize Barclays’ investment bank and refocus the company’s efforts on its better performing retail businesses, particularly credit card unit Barclaycard.

S&P instead urged continuity, saying Barclays has made “substantial progress” under Barclays chief Jes Staley’s leadership.

 

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